BlackBerry has changed from being just a smartphone manufacturer and they will continue to do so until they return to growth and profitability.
Replying to questions fromBusiness Line, BlackBerry CEO John Chen explains his future game plan and India’s relevance for BlackBerry.
You started a restructuring process to cut costs and bring the right focus. Is that process now over? How would you leverage the new organisation to turn around the company?
I’m happy to say that we have completed the restructuring and have started to hire in key areas of business. Getting our costs and organisational structure right was a difficult, but crucial phase in our turnaround plan.
In August, we also announced the creation of our newest business unit – BlackBerry Technology Solutions (BTS) – which includes innovative assets such as QNX. With BTS, we are better aligned to accelerate our innovation and growth beyond our core markets. BTS will help us create solutions that will expand our end-to-end, secure protection to more and more end points and machines.
With our new structure, we are now well-positioned to provide our enterprise customers with the best, most secure end-to-end enterprise mobility solutions. We are also well positioned to lead in the machine-to-machine space and the Internet of Things. BlackBerry is known for security – it’s in everything we do – so we will apply our learnings from enterprise mobility to address the emerging connectivity and security needs within the Internet of Things.
Recently you said that the chances of BlackBerry survival have improved from 50 per cent to 80 per cent. How will you ensure that the 20 per cent risk associated is mitigated over the next 6 months?
I believe we have mitigated that risk already. With a new leadership team, a clear vision and a completed restructuring process, BlackBerry is set up to move forward in a positive direction.
We also have a strong cash and investment balance that allows us to do things like make strategic investments such as acquisitions that deliver new capabilities and increased value for our customers. Risk is always there, but I am confident we have taken the necessary steps to alleviate it to the degree that we can.
With regard to India specifically, we have stabilised our operations here through some strategic cost cutting, realigning our supply chain, and focusing on our core strengths of enterprise and security.
We have experienced great success in the enterprise segment in India. BlackBerry Enterprise Service 10 (BES10) has more than 1,000 installations in India, which is significant considering we only launched it in the beginning of 2013. We’ve also seen several new wins in the Indian market this year, including Indiabulls, Nishith Desai Associates, ITC, AZB & Partners, Bharucha & Partners, and are confident this momentum will continue.
Has your strategy to partner with Foxconn paid off? How are models like the Z3 doing in the market?
The BlackBerry Z3 is the first smartphone to emerge from our strategic partnership with Foxconn to develop devices for emerging markets. It embodies all that BlackBerry 10 offers, with exceptional productivity features and reliable communications in a stylish, all-touch design that is perfect for customers in India.
The BlackBerry Z3 has been extremely well received in both India and Indonesia, and we continue to see strong demand for the device. Initial inventory of the device nearly sold out in India within two weeks following launch. We hear from users that they like the price, screen size and battery life. We’re listening to what our customers are saying and plan to continue to deliver competitive devices.
We will continue to leverage the Foxconn partnership, as well as our partnerships with other key manufacturing partners, to deliver innovative products in a more timely and cost-effective manner.
Despite the new BB10 operating system, BlackBerry market share has not improved. Do you think that the company needs to rethink the devices strategy?
BlackBerry devices are part of our unparalleled ability to provide the most secure end-to-end enterprise mobility solutions from the smartphone to the data center. We’ll continue to sell devices as long as there are customers who value them. We are a mobile solutions company that services the needs of customers looking for secure technologies that drive productivity, communications and collaboration – and the device is a critical piece of that equation.
When I look at BlackBerry 10, I don’t just look at the market share. I look at whether it provides the core capabilities that our customers have come to value – the security, of course, but also the unique interface and user experience that enables them to work faster, better and smarter.
We remain confident in the value of BlackBerry 10 and with the BlackBerry 10.2 operating system recently named by Digit magazine as ‘The World’s Best Mobile OS,’ we know that users appreciate it as well. This ranking also proves that BlackBerry 10.2 is built on a solid foundation of innovative features and allows them to be as productive as possible, at work and on-the-go.
‎In India, despite having a reasonable user base, why has the company not got the pricing right? New devices have been launched at a higher price than rival products.
I believe our pricing is competitive, especially for the higher value that BlackBerry delivers. The BlackBerry Z3, for example, has an attractive price point for the features and benefits it provides.
In addition, we frequently offer our Indian customers attractive offers on our handsets. In March this year, for example, we revised the price of our Z10 handset to Rs 17,990. We saw a phenomenal response to these promotional offers on BlackBerry Z10 and Z30.
These compelling price points enable our customers to experience the latest technology and ease of use in one device which comes at pocket friendly prices. And we’ll continue to offer customers a portfolio of devices across different price points for multiple regions to enable improved productivity, enhanced security and a better communications experience.
How do you see the threat from Chinese players like Xiaomi and Huawei who are cornering a significant share of the new sales?
BlackBerry is a pioneer in mobility. We have always been, and continue to be focused on innovation. And you will see some of our latest innovations with our upcoming BlackBerry Passport smartphone. Frankly, we don’t see those Chinese players you mentioned as threats in our target market. We see them playing more at the low end.
And it’s important to remember that BlackBerry is more than just a smartphone manufacturer. We are a mobile solutions company that takes a broader approach to servicing the needs of customers looking for secure technologies that drive productivity, communication and collaboration.
BlackBerry has an aggressive plan to continue to lead the enterprise mobility market while also developing a broader set of tools and value-add services. We don’t see those Chinese players you mentioned as threats across our broad set of capabilities.
In India, smartphone penetration is still very low compared to other major markets. Does this give BlackBerry an opportunity to ride on the growth potential?
BlackBerry continues to be among the top five smartphone brands globally, and India is one of our top 10 markets and remains an extremely important country for us. In fact, India was also one of the first markets targeted for the BlackBerry Z3 and the device has been very well received.
While we consider the BlackBerry Z3 launch a success, we aren’t stopping there. We will continue to provide products and services that meet the needs of our Indian customers.
How significant is the enterprise market in India for BlackBerry?
The enterprise market continues to grow in India and holds immense untapped potential for BlackBerry, especially in sectors like retail, insurance, banking, healthcare, construction and professional services. Extending our leadership in enterprise mobility management is a key to our transformation. We are seeing a great opportunity to grow our presence in India as the enterprise market here begins to embrace mobility as a vital part of doing business.
In India, we are aggressively targeting large, mid-level and small businesses alike. We offer the most reliable end-to-end secure communications platform, from the device to the server. We are unmatched when it comes to enterprise mobility and the security, productivity and communications features we deliver.
Late last year, we announced the opening of BlackBerry Enterprise Solutions Centers in Mumbai and Gurgaon as part of our focus on the enterprise mobility market. These centres will cater to the needs of enterprise customers and provide them with a walk-in experience of BlackBerry’s robust enterprise mobility management solutions.
Overall, what are your targets for BlackBerry India when it comes to contribution to the company’s global growth game plan.
We don’t provide financial projections at the country level, but as one of BlackBerry’s top 10 markets, India remains an extremely important country for us. Indian companies are increasingly looking to mobile technologies to improve their operations and become more competitive, while smartphone penetration among consumers grows at above-average rates.
Our expectation is that BlackBerry will continue to thrive in India because our strategy is so well-aligned with India’s market needs. We see great opportunities ahead of us as we continue to make significant headway on our plan to return BlackBerry to growth and profitability both in India and globally.
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